Although not an exhaustive compliance audit, this can serve as a tool to evaluate if your current program meets Department of Labor and Internal Revenue Services requirements.
Check all those applicable:
Communication and Monitoring Requirements
Model COBRA Notices that are part of your communication procedures:
Notice to all employees explaining their rights under COBRA (commonly known as the “General Rights Notice”)
Notice to employees/dependents who experience a “qualifying event”
Notice to qualified beneficiaries if they are not eligible to continue coverage
Notice to COBRA participants if their payment is short by an “insignificant” amount
Notice to COBRA participants of their conversion privilege
Notice of termination when coverage is cancelled prior to the end of the COBRA term
____ I understand the criteria that is required by law to be incorporated in all the notices listed above.
____ My current program meets the requirements of providing these notices on a timely basis.
Monitor COBRA election periods
Monitor COBRA participant’s time frames
Collect funds for COBRA monthly premiums
Process Documentation & Retention
COBRA administration is more than just taking care of individuals “on COBRA”; it is a total process of notifying, tracking, and documenting all facets of compliance with the complex law.
Documentation and proof of mailing of all notifications for 7 years
Documentation and proof of mailing of all received communications for 7 years
If challenged by a regulator or a carrier, I could provide documentation that COBRA has been properly administered
Compliance is not optional, it is mandated by law.
Penalties, fines and repercussions
- Plans that violate COBRA’s provisions may be subject to a non-deductible excise tax penalty equal to $100 per day, per affected individual, per violation
- In addition, ERISA provides notice penalties of up to $110 per day from the date of the compliance failure
- Employers may also be sued by the employee for COBRA noncompliance
- Employer may be responsible for all medical bills and punitive damages
- Carriers may refuse to pay claims if they determine an individual is participating via a COBRA plan improperly